Reciprocal System #565 "The Road to Permanent Prosperity" ch19-Who Reapes the Harvest? A

Transcript

all right how is everyone doing tonight uh this is welcome to my channel and this is an educational Channel we take a look at Great theories of everything cosmology's all-encompassing theories and um we try to you know parse them out and figure out best way to use them for our own edification our formation of a holistic worldview our Paradigm shifting our Awakening to 5D Consciousness uh these things can all uh be made uh a little bit more a little bit easier if we have some templates and some uh theories of everything that um you know underg our quests and uh today is our 565th video that we've done on the reciprocal system of theory from Dewey B Larson and Associates and um Mr Larson lived in the 20th century died in 1990 and he uh wrote books on chemistry physics astronomy but he also wrote books on metaphysics and economics and uh they're all based on the same Theory so he has one Theory and plugs it into every subject and shows how to do that um and in many cases uh in at least in my opinion some of it is uncanny so um and it to me it just makes a lot of sense Larsson is one of the few scientists to propose a universe made out of motion not matter not energy but motion and motion kind of in the most generic sense of as um really uh what he calls scalar motion scalar motion is a motion that has a magnitude but it has no specific Direction um scalar motion is a motion that uh you can Envision using a balloon that you put dots on with a magic marker as you blow up the balloon all the dots will be moving away from each other um it's kind of like the surface of that balloon MO is moving everything away from each other and so everything is moving in every direction no specific Direction and if you reverse that and contract the balloon all of the dots will be moving toward each other but again in no specific Direction and larsson's uh first primary postulate states that the universe is composed entirely of one component motion existing in three dimensions in discrete units and with two reciprocal aspects space and time and so that's kind of how he get started and uh from there he deres a theoretical Universe what his Universe would look like if his postulates were correct and then he Compares his theoretical Universe with uh some of the uh T scientific tables and otherwise empirical uh universe of the modern scientists and uh Larson is able to practically recreate some of the scientific tables strictly from his theory now when he plugs it into economics that's what we're looking at today we're looking at Larson's uh second book on economics that is called the road to permanent Prosperity I think you can see what benefit you can get from that and um we're in chapter 18 uh on wartime economics now when Larson plugs it into um economics he posits first that economics is a science not a social science and that there are exact formulas just like there are in physics or chemistry and that we need to dispense with the sociological approach of Economics where people are putting in policy and political and sociological and ideological preferences into their economic um you know um um prescriptions and that first you have to construct an economic system that is based on reality and just like if you're building a house it has to comply with the laws of physics and then you can worry about the sociological stuff but first it has to comply with the laws and some of the basic laws um work or starve you have to produce something um and um that uh the two reciprocal aspects in the economic mechanism are production and consumption and that um what you produce is exactly what you're going to consume and um Larson ends up arriving at about 17 principles um that he contends are exact and um that uh you know we need to follow uh or else we're going to to get ourselves off track um okay now um I'm sorry for last episode I kind of abruptly stopped uh when I should have tried to finish the chapter I was under the impression that there was some kind of uh minor emergency going on that I needed to tend to right away and um there wasn't but um I never got back to finishing that video so we are a few pages away from the end of chapter 18 on wartime economics which we'll wrap up right here and then start on the next chapter right after that uh if you'd like to get uh more of a description of the reciprocal system in general uh watch uh as many as you want but uh any of my first 474 videos on this subject um has a longer explanation of the reciprocal system gets into the postulates and and um explains you know what they mean and how they uh what the ramifications are and then um this book I started about 6 weeks ago so if you want to start from the beginning of this book The Road to permanent Prosperity uh go back about 6 weeks in the archives with chapter and start with chapter one but for now we're going to be reading from chapter 18 failure to keep Pace with inflation is the most common mistake in the administration of rent control it is of course due to the popular misconception that rent control helps to hold down the cost of living and this futile attempt to evade the realities of wartime econom economics has some very unfortunate collateral effects one is that the attempt to prevent the landlords from taking undue advantage of the housing shortage goes to the Other Extreme and does them a serious Injustice if their rentals are not allowed to share in the inflationary price rise they are in effect being compelled to reduce their rents as the True Value of $300 in pre-war money is reduced to $300 in pre-war money um is reduced to $250 by a 20% inflation furthermore when the conflict finally comes to an end the nation that has adopted rent control is faced with a dilemma if the controls are lifted and rents suddenly increase to levels cons consistent with the inflated General average of prices there will be an outcry from those who have to pay more consequently there will be strong political pressure for maintaining the controls and keeping the rents down but if the controls are continued building of new homes for rental purposes will be unprofitable and the housing shortage that developed during the war will continue this was not a very difficult problem in the US where the controls during World War II were limited and where such a large part of the new housing construction is for sale rather than for rent but it created some serious situations in other countries France for inst for instance in the words of a European Observer quoted by Samuelson and nordhouse quote nothing is as efficient in destroying a city as rent control except for bombing end quote the best way of handling the price situation during a war is to prevent any inflation from occurring but if some rise in the price level is permitted to take place as a byproduct of the wartime wage policies perhaps any any price that any prices that are controlled should be periodically adjusted to conform to the new general price level there is a rather widespread impression that price control did have an effect in holding down the cost of living during the two World Wars but this conclusion is based on a distorted view of the effect that the controlled prices exert on the prices of uncontrolled items as indicated in the statements quoted in the discussion of the wartime price of sugar it is widely believed that an increase in some prices tends to cause increases in other prices and that controls over some prices therefore hold down the general price level such a Viewpoint is clear implied in Molt's assertion that the regulating agencies in due course performed a national service of first importance in pegging prices at substantially lower levels but his own statistics show that during the 13th month 13-month period to which he refers the price level of uncontrolled Commodities Rose 25% furthermore the inability of the price indexes upon which the inflation statistics are based to reflect the kind of indirect cost increases that are so common in Wartime or under other abnormal conditions is uh notorious this uh the BLS index does not include this is a quote this index does not include or make sufficient allowance for various intangibles such as forced trading up because of shortages of or deterioration of low priced lines General lowering of quality of the merchandise and elimination of many of the conveniences and services connected with its distribution say the analysis of the Department of Commerce the conclusion of these anal analysts in 1945 at the end of World War II was that prices for such things as food and clothing items that account for over half of the consumer budget were not much different from what they would have been without controls the statistical evidence definitely corroborates the conclusion which we necessarily reach from a consideration of the flow of purchasing power that is holding down the prices of specific items simply raises the prices of other Goods while at the same time it introduces economic forces that work directly against the primary objective of the control program we get nothing tangible in return for putting up with the absenteeism the unpenalized inefficiencies the padded Personnel in Plants the upgrading for pricing and downgrading for quality and service the cues the bottlenecks the misdirection of resources the armies of controllers and regulators and inspectors associated with suppressed inflation the only way in which uh that's a quote and that's the end of the quote the only way in which prices can be held at the equilibrium level the level established by production costs is to prevent any excessive money purchasing power from reaching the markets if price control measures accomplished anything at all toward holding down the general price level during the wars which is very doubtful particularly in view of all of the waste and inefficiency that they Foster this could only have taken place indirectly by inducing consumers to spend less and invest the uh Savings in war bonds or other government securities whether or not any such effect was actually generated is hard to determine but in any event there are obviously more efficient and effective methods of accomplishing this diversion of purchasing power from the markets price control for the purpose of holding down the cost of living is a futile and costly economic mistake at any time whether in war or in peace okay that is the end of chapter 18 wartime economics we're going to start up here with chapter 19 uh which is called who reaps the harvests those who consider the subject matter of the preceding chapters thoughtfully can hardly fail to be impressed with the extent to which economic errors have been due to looking only at individual details rather than visualizing each situation in its entirety as in so many other fields of human endeavor we have been unable to see the forest because the trees because of the trees so close around us the worker who realizes that it would be easier to make both ends meet if his wages were increased naturally jumps to the conclusion that all workers would be benefited by raising raising all wages but we know both from Theory and from a wealth of actual experience that no such benefit results the theorist who observes that the increase in demand for a particular commodity that results from a decrease in price concludes that the demand for all Goods could be increased by cutting all prices but we have found that the total effective demand is limited by the amount of purchasing power created through production of goods and con not be increased by any kind of price juggling the collectivists finds that by getting on the government payroll he can gain an exemption from natural economic laws and can pursue his Visionary claims untroubled by the necessity of producing results commensurate with the cost so he proposes to solve all economic problems in the same happy and carefree manner by bringing in everything under government control but we know that a higher authority than our national Administration has decreed that man must first produce that which he wishes to consume and we cannot all transfer our share of the burden of production to someone else the economic patent medicine vendor sees that particular groups of individuals clear up all of their difficulties as if by Magic if they can just get a subsidy from the government so he proposes to eliminate all economic difficulties by subsidizing everybody but the realities of economic life are not so easily evaded all of these misconceptions and many more of the same kind stem from the same cause a failure to recognize that the situation as a whole is governed by limitations which the individual can escape if he is able to transfer his burdens to someone else before concluding this presentation of fundamental economic theory and beginning a discussion of the application of that theory to present day problems it will be advisable to review the facts with respect to another of these misconceptions one that will come up in connection with several of the Practical measures that will be considered the subject in question the division of the products of the economic system among the major claimants is not only important from a technical standpoint but also needs to be clearly understood for the sake of creating a better Spirit of cooperation between two important segments of the economy the suppliers of Labor and the supplier of the services of capital when we look at the conditions surrounding an individual Enterprise we find that a part of its income is used to meet miscellaneous expenses and the balance is available for division between those who furnish the labor and those who Supply the Capital Services on the face of it therefore it would seem that there is a direct conflict of interest between the workers and the suppliers of capital if the workers get a larger share of the total those who Supply the capital must necessarily get a smaller share and vice versa this view of the situation does not necessarily imply that there is no common interest in which both can participate on the contrary it would suggest that any increase in total income is beneficial to both parties regardless of the proportions in which the division is finally made but it does definitely indicate that the rewards of the workers and the suppliers of capital will be materially affected by their relative economic and political strength this is part of the basic philosophy of the labor labor unions it is the contention of the unions and of the economists who adopt the view of organized labor that labor has on the whole been exploited and has not re received a fair share of the products of its efforts by a combination of political and EXT legal coercive measures the unions have acquired a very substantial economic power and they claim credit for most if not all of the Improvement that has taken place in wage standards in the last few decades the fundamental economic principles set forth in the preceding Pages make it clear that this Viewpoint is completely erroneous exact analysis shows very definitely that for the system as a whole Capital costs are independent of wages and all efforts of the labor unions or anyone else to increase the general level of real wages at the expense of the suppliers of capital and to secure a larger proportion of the total value of production for the wage earners are futile the division of the product between wages and capital costs is fixed in total by factors beyond the control of either the employers or the labor unions and no amount of negotiating or forcable action by either party can alter this proposition here again the trees have been preventing a clear view of the forest the true situation is the same as in the case of a subsidy if one individual gets a subsidy from the government he prospers of course but it is clear that this gain is made at the expense of the rest of the community and if we subsidize everyone there is no gain for anyone similarly one individual or one group prospers by getting a wage increase but any increase in wages necess uh necessarily causes an increase in the price level regardless of what if anything business firms may try to do in the way of holding the line consequently the consumers the general public pay the bill a wage increase for everyone is like a subsidy for everyone there is no gain to anyone this does not mean that the labor union efforts to secure higher wages are useless to the particular workers involved on the contrary the economic status of each member of society is as much a matter of relative Advantage within the group as it is of the true level of prosperity in the continual EB and flow of economic life it is necessary for everyone to maintain a jealous watch on his relative standing in order that he may may not lose the benefit of a rise in the general standard of living by a lowering of his relative position labor unions can improve the wage position of their members by extracting concessions from the employers which are ultimately reflected in the prices paid by consumers in general however the con the contention of the unions that they have increased the General level of wages by forcing employers to pay a more Equitable proportion of the total national income in wages is 100 100% wrong the general level of wages including salaries professional earnings wages of the self-employed Etc cannot be altered by this internal struggle for advance Advantage the increases that have taken place in the general level of real wages have been due entirely to increase productivity if union labor improves its relative position it does so at the expense of other groups of workers the average wages of the suppliers of Capital Services have not been and cannot be affected by any arbitrary change in money wages the economic profession has never distinguished Itself by its handling of the theory of wages the earlier economists held to the Viewpoint that wages would tend to become stabilized as a bare subsistence level this is the doctrine of Ricardo malus and Marx and it has a close Affinity to the present day labor union attitude unquestionably the great majority of the workers believe that if all legal and EXT legal restraints were removed employers would drive wages down to the lowest possible point the subsistence level in order to secure maximum profits modern economic thought has centered largely on the marginal productivity Theory which in essence explains the wage level as being established by the productivity of the marginal worker the last worker the employer can afford to hire before reaching the point of unprofitability as JR Hicks explains quote the theory of the determination of wages in a free market is simply a special case of the general theory of value wages are the price of Labor and thus in the absence of control they are determined like all prices by supply and demand end quote but those who have attempted to make a practical application of this Theory have found that the situation is not as simple as Hicks would have us to believe in order to make a supply and demand theory of wages workable some additional assumptions must be made and a and great difficulty has been experienced in formulating any plausible hypotheses Dale Yoder tells us that many assumptions about wages are so farfetched so distant from reality that the usefulness and applicability of available Theory are drastically limited and he sums up the existing situation in these words while there is is No Lack of hypotheses that seek to explain how wages are determined evidence supporting such hypotheses or contradicting them is meager the fundamental fallacy in all present day wage theories is that they assign the dominating role of the in the establishment of wage scales to the employer in the subsistent theories the employer drives wages down as far as the restraints imposed upon him will permit the leeway for discretionary action is somehow C somewhat curtailed in the marginal productivity Theory but it still sees the employer as having the whip hand over the wage situation except to the extent that his prerogatives are forcibly limited here again the theorists have fallen into the error of assuming that the conditions which govern the part also apply to the whole it can easily be demonstrated both theoretically and statistically that the employers have no control at all over the general level of real wages in spite of the unquestion ability of an individual employer to take a hand in the establishment of money wages in his own industry this is exactly the same situation as that which prevails with respect to prices individual producers can modify their own sales prices to a certain limited extent but as was shown in chapter 10 the general price level is determined by factors that are entirely beyond their reach before we dig into the basic principles to see why the employers have no control over the general wage level let us first take a look at what has actually happened with respect to the division of the products of our economic efforts in this case as is true in general we do not have have to rely on abstract Theory alone in reaching our conclusions there are ample facts available for testing all theories everyone knows that production has increased tremendously since the Advent of the power age in order to check Theory against actual experience let us see what gain each of the two claimants the worker and the supplier of capital has made from this great increase in the output of economic ma of the economic machine according to the subsistence Theory the bulk of the gain must have ACC crew to the employers that is to the owners